The trope that architects are bad at business might not be completely true, but running a successful business in the AEC industry is really tough. There are some tried and tested strategies that can work to your firms benefit, and take you on the path to exponential growth and new markets. Does architectural outsourcing feature on this list? Read on to find out.
As practicing architects, we love to focus on the designing phase of our projects. After all, that’s what we learnt best at architecture school. That’s the passion that drives us. However, it is imperative that we run our practice as a business, NOT just a passion.
AEC Industry and Architectural Firms
Growth of the AEC industry is forecast at 4% between 2016 and 2026, which is well below other industry standards. Competition for projects in the future is only going to get more intense.
To add to our woes, clients tend to perceive architectural services as a cost rather than a value. As a percentage of the project cost, the architect’s fees are insignificant to say the least and on the other hand, engaging a good architect can be the telling difference between a successful project and an unsuccessful one.
While focusing on delivering quality professional services to a client, architects need to create a sustainable, profitable, growing business model of their own. Regardless of the size of the architectural firm, it is important to have a rock-solid business development plan. Here are 9 salient business development strategies for architectural firms:
- FINDING THE IDEAL CLIENT MATCH
Every architectural firm has its own unique strength. Only through a learning curve you can determine your specialization in a particular asset class. It is important to identify one’s strength and focus there. Outreach plans should be directed at those clients that match the firm’s profile and future growth plans should primarily center around such clients. Also, quality market research should always guide the firm’s journey forward, being guided by industry trends, competitor information, new product developments etc.
2. KEEPING THE FIRM PROFITABLE
Profit is what keeps a firm running for the long term. Yet 53% of US firms view increasing firm profitability as one of their top financial concerns. At the onset, while starting your practice, you need to start it as a small business. Running projects on time must be a binding commitment to ensure profitability.
Data indicates that 70% of firm billings are derived from repeating clients. There is excellent software available to guide you as to which of your existing clients are worth repeating to contribute positively towards profitability.
3. NETWORKING WITHIN THE INDUSTRY COMMUNITY
Networking has traditionally been the primary means for architectural firms to generate more business. Now, with the aid of digital media, networking has assumed huge dimensions. Networking with industry partners like contractors, designers, agencies, and builders will go a long way in promoting your architectural business. It not only enriches information exchange but also invigorates the grapevine. It is a mutually beneficial, symbiotic arrangement. Joining clubs, groups, industry conferences, and associations to gain maximum exposure for the firm is a great way to move forward. The growth rate of an architectural business has a direct co-relation with its network coverage.
4. LEVERAGING DIGITAL MARKETING FOR GROWTH:
Digital marketing isn’t just for FMCG products or cosmetic companies. The hashtag #architecture has been used over 100,000,000 times on Instagram. Leading architectural firms use Instagram to showcase their latest commissions and to connect with their audience. Effective digital marketing can generate a very healthy inward traffic for architecture news, thoughts, and opinions towards the firm. Blogs, articles, and case studies can pave the way for a strong online presence. And this being a specialized area, leveraging expertise of digital marketing professionals can lead to maximum benefits. Architectural outsourcing can begin with social media management.
5. SHARING REFERRALS:
Referrals are very strong instruments for growth in the architectural industry. Clients are exposed to a huge factor of uncertainty where large investments are spread over extended periods in a high technology-based industry of which the client has little or no knowledge. The price of mistakes, failure, project delay, rework etc. are very high and can destroy an otherwise feasible and profitable project. The client needs to be assured of dependability, risk coverage and to feel that they are in safe hands. Referrals reaffirm that you have done it all before, know your way around well and have consistently delivered.
Sponsoring local events, speaking at business gatherings, and supporting associated businesses add to the overall goodwill and help in image and brand building.
6. PREPARING FOR AND MANAGING GROWTH FROM THE START:
Whether growth is gradual or exponential, it needs preparation and proper management. It is important to have proper systems in place to track performance and monitor results. Delayed projects are the bane of the architecture industry and can lead to huge losses and adverse growth prospects. Cost and time management systems will need to be in place right from the start. Whether it’s a very large architectural firm or a small boutique studio, operations favoring growth in a creativity-based industry always needs to be flexible, agile, and quickly adaptable. This has been one of our greatest learnings at Aligned Studios and forms the strongest pillar of our guiding principles.
7. HIRING EXPERTS TO FILL GAPS FOR SPECIALIZED WORK
Being in an industry that is primarily creativity and technology driven, one can never overlook the vital importance of good quality recruiting and hiring. Only quality personnel can deliver quality work. Even after having put our best foot forward in putting together the best team, we must humbly acknowledge and concede that as architects we are not likely and also not expected to be as proficient at skills outside of our own. Your organization will always benefit more from skilled services in software management, digital marketing, human resource management and more as we move ahead.
8. PROVIDING ADDITIONAL SERVICES TO BOOST PROFIT MARGINS
The entire Architect – Client relationship revolves around one pivotal word, TRUST. As big money is invested for prolonged periods and multiple hi-tech agencies get involved, the client turns to the architect for honest advice. As the trust factor builds, very often clients feel safer having the architect take over associated services like valuation, surveys, procurement, legal compliances, etc.
9. COLLABORATING WITH AN EFFECTIVE PARTNER
On the fast track to growth, it has often proven helpful to tie up with a collaborating partner to bolster success. The choice of an effective architecture outsourcing partner is of utmost importance. Background checks need to be done on the proposed partner for credentials, referrals, and previous work records. And the proposed architectural outsourcing partner needs to be verified for corporate-cultural compatibility.
At Aligned Studios, we are making architectural outsourcing positive. We have been building brick-by-brick to feature amongst the best global architectural collaborators. We focus on hiring the best available talent and on building a reserve talent pool. Our teams undergo constant training and upgradation efforts to remain abreast with the global best. We painstakingly train each team member to be a great cultural fit for our clients to enable a seamless work environment for architectural outsourcing.
In our ongoing effort to be a world-class architectural collaborator, we have successfully joined hands with the best in the industry to enhance their team and propel them into expanding markets and higher profitability. We deliver well within the parameters of time, cost, and quality.
Our business model is much more than architectural outsourcing, it is a global collaboration for staff augmentation. It has been widely accepted and appreciated by our clients as very collaborator friendly.
We welcome new collaboration proposals to explore new horizons together. Get on a quick call with us to understand how we can help your firm grown.